Human Capital Management: Have You Forgotten Something?

Michael Gallagher, .

people in an office environmentMany business owners neglect one of the most important components of leadership; employee engagement. There are 4 steps in the business growth process: plan, train, engage and impact. The third piece – engagement – is the one that some companies seem to miss. They may do all the other people tasks such as providing position descriptions, outlining performance objectives and developing performance management programs, but by overlooking this critical element of leadership, a huge gap is created in the forward momentum of their business. It doesn’t matter what the leadership role; it’s about how the leader responds to and engages with their employees. Managing people is the critical element; it is the part that makes businesses work.

Creating and sustaining employee engagement has three important elements:


What do your employees need to do their job? This includes clear job expectations. What is expected from the employee directly, concisely and consistently? Are these expectations clearly communicated and agreed upon? Resources also include materials and the training in how to use those materials. Co-workers are considered part of resources as they are the people with whom employees interface to get their jobs done.


Recognition comes in three forms: recognition of the employee, recognition of their work and most importantly, recognition of their opinion. When you recognize an employee, you show them that you care about them and see them as much more than a cog in the machine. You value their place in the organization. The recognition of an employee’s work should happen when the work is completed and not held over until a formal review.

Recognition of an employee’s opinion is perhaps the foremost type of acknowledgement. The people doing the job are, or should be, in the best position to know how to do it better. These opinions must not only be solicited but also responded to in order to give value to what the employee is adding to the substance of the business culture. Organizations must specifically, deliberately and individually solicit, recognize and respond to the ideas coming from employees.


Periodic reviews must be completed at least semi-annually. From these reviews, opportunities are created for the employee to train for and grow in the job. If an employee demonstrates little or no growth in skills over a period of a year, it is a negative indicator for the company. That employee, as a factor in the company’s growth and success, is no more valuable than when they first were hired.

In addition to training plans, personal development plans for employees are critical. What can an employee reasonably expect in terms of progression? What are they working towards? Where do they fit into the succession plan for the business?

These are the three elements of employee engagement that I use as part of a framework for business owners looking to redefine and rejuvenate their organizations. The engagement component is essential to track progress for employees and therefore, is closely connected to tracking the health, vision and goals of the organization.

Implementing some of the ideas mentioned here can be challenging. If you would like to discuss them in the context of your own specific business please contact us. We’d be glad to help.

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Michael Gallagher

Mike Gallagher, President of Michael Gallagher Advisory, has spent the past 20 years helping small business owners and managers develop and implement strategic business plans, achieve sustainable, targeted growth and solve the problems that keep them up at night.